Furthermore there's a divorce of ownerships and control; this means that the board of directors and the managers are making the decisions on behalf of the share-holders. This means that if the managers make the wrong decision it’s on their neck when they meet with the B.O.D. (Board of directors or Share holders). But in a sole traders business the ownership and the control is “one in the same”. This means that the ownership and the control over the business is the same person. Also it is Ian Calloway who is making all the decisions on a day to day basis.
Moreover it is easier for the business to raise more money because the money Tate and Lyle have received in selling their shares contributes to the overall profit in which Tate and Lyle receive. To add onto that Cycle Asylum has a much harder task of raising funds for his small business because he owns his own resources meaning that he his in charge of what resources he would acquire and those he don’t need.
On one hand Tate and Lyle have LIMITED LIABILITY. This means that the Tate and Lyle shareholders don’t lose their personal belongings, but all they lose is the money they invested. This is good because the share holders are able to know who is bringing the business down and who is actually keeping the sugar factory up and running.
But on the other hand Cycle Asylum has UNLIMITED LIABILITY. This means that if the business goes in to debt, Ian Calloway would lose his precious possessions and belongings of value to pay off his debt.
Finally Tate and Lyle and Cycle Asylum share the same aim in trying to get a profit. Although this aim is common to both companies. The only difference in this is how they use their profits.
In Tate and Lyle they use their profit to share it out equally between all the share holders which invested in the company. They also re-invest in things such as:
New Technology for their research and development facilities, machinery to increase the speed of mass production i.e. more efficient, and finally re-invest in commercial partnerships. This allows Tate and Lyle’s name to be on products which uses their sugar E.G. McVities biscuits.
But Ian Calloway uses his profit to pay himself for his daily living, and the five people who work for his bike shop. But Ian Calloway has the option to re-invest. He doesn’t have to re-invest but if he chooses to; he could re-invest in things such as
- New Tires
- Bike accessories such as helmets
- New handle bars
- And even tools for him to use when offering his service of repairing broken bikes.
